Used Vehicle Prices Expected to Stabilize in 2024, According to Cox Automotive
After a period of record-high prices, used vehicle prices are projected to stabilize in 2024, providing relief to buyers in the pre-owned car and truck market. Cox Automotive, an automotive data firm, anticipates that wholesale prices on its Manheim Used Vehicle Value Index will only increase by 0.5% by the end of 2024 compared to December 2023. However, pricing may fluctuate on a monthly basis due to selling seasonality and other factors.
Decrease in Prices
This slight increase follows a 7% decline in 2023 and a nearly 15% drop in 2022 from inflated prices during the COVID-19 pandemic. During that time, the availability of new vehicles reached record lows due to supply chain and parts issues that disrupted vehicle production.
Jeremy Robb, Cox Automotive’s Senior Director of Economic and Industry Insights, stated that while 2024 is expected to be less volatile than 2023, unexpected changes can still occur in the wholesale market.
Impact on Consumers
The stabilization of used vehicle prices is good news for potential car buyers. However, it’s important to note that used vehicle prices are still higher than pre-pandemic levels. Retail prices for consumers typically follow changes in wholesale prices, but they have not decreased as rapidly in recent years.
According to Cox, the average listing price of a used vehicle was $26,091 last month, which is a 3.9% decrease from the previous year and 7.5% lower than the end of 2021. In comparison, average listing prices for used vehicles were below $20,000 in 2019.
Used Vehicle Sales Forecast
Cox Automotive predicts that used vehicle sales will increase by less than 1% to reach 36.2 million units. This forecast includes 19.2 million used vehicle retail sales. In contrast, the forecast for new cars and trucks in the U.S. predicts a 1.3% increase to 15.7 million units.
Jonathan Smoke, Cox Automotive’s Chief Economist, mentioned that although the economy and auto market are expected to experience modest growth of 1% to 2%, this is preferable to a recession. Additionally, as the supply of new vehicles returns to levels seen in spring 2020, consumers can expect lower prices.
Rise of Electric Vehicle Sales
Cox Automotive also anticipates an increase in all-electric vehicle sales, with these vehicles accounting for more than 10% of retail new car and truck sales in 2024. In comparison, approximately 1.1 million units, or 7.4% of retail sales, were electric vehicles in 2023.
Overall, the stabilization of used vehicle prices and the growth of electric vehicle sales indicate positive trends in the automotive market for 2024.
